Bank Branch Closures

Patricia Gibson Excerpts

Wednesday 18th March 2020 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I echo the thanks to my hon. Friend the Member for Midlothian (Owen Thompson) for securing this important debate. I feel as if I have spent quite a lot of time in the five years since I was elected bemoaning the stampeding of banks out of our communities without so much as a backward glance.

My constituency has several towns where there is no bank at all, and other Members have talked of similar issues. Ardrossan, Stevenston, Kilwinning—a town of 21,000 people—West Kilbride, Dalry and Beith are all without a bank, and Kilbirnie’s last bank has reduced its opening hours. That is the only bank left in the entire Garnock valley, which is three distinct towns with a collective population of more than 19,000 people. Losing the last bank in our towns is a severe blow to our communities. It undermines their commercial stability and has a significant social impact, which we have heard much about today.

My constituency, like that of every Member who has spoken, has been hit particularly hard, and I share all the concerns expressed by my hon. Friend the Member for Midlothian (Owen Thompson). In Scotland, according to research, we have lost more than one third of our bank branches since 2015. The consumer organisation Which? found that banks shut 396 Scottish branches between January 2015 and August 2019, reducing their number by 38%—an alarming rate of closure, by any measure. My hon. Friends the Members for Midlothian, for East Renfrewshire (Kirsten Oswald), and for Kilmarnock and Loudoun (Alan Brown) and the hon. Member for Strangford (Jim Shannon) have all said similar things.

As we have heard from my hon. Friend the Member for East Renfrewshire, it is clear that any consultations are simply window dressing. They are tick-box exercises so that the banks can reassure themselves and the Minister—“Oh yes, Minister, we have undertaken consultation”—when we know that is not true in reality. I remember the same thing happening in 2007 and 2008, when there were mass post office closures in my constituency. That was long before I was elected to this place, and perhaps innocently—perhaps even naively—I, along with other Scottish National party activists, set up street stalls. We went door to door with petitions. We did everything we could to get the post office to reverse those closures, but of course nothing changed, because the consultations were not at all meaningful. We have memories of these consultations from other times, and I say to the Minister that this has to stop.

The Treasury Committee concluded that

“there are still large sections of society who rely on bank branches to carry out their banking needs. A bank branch network, or at the least, a face-to-face banking solution, is still a vital component of the financial services sector, and must be preserved.”

I know that the Minister probably will not agree—I have said this to him before, during one of the countless debates on this topic I have participated in—but I genuinely believe that because there was no UK Government intervention when RBS announced its radical, eye-watering programme of closures, although we as taxpayers owned a significant stake in RBS, the fact that nothing was done emboldened the other banks that have no element of public ownership. If a publicly owned bank can do it, why can a private bank not do the same without any kickback or repercussions from those in the corridors of power?

If the Government are as willing as they have demonstrated to accept closures of bank branches—banks that they owned, in the case of RBS—that is extremely disappointing. Throughout RBS’s entire closure programme, I listened very hard, but I could not hear anybody in Government condemning those closures. All I heard was a distancing from any sense of responsibility, which is really disappointing for our constituents. It seems that other banks felt they could employ the same tactics and close down wherever they felt it was no longer convenient to have a branch, without any consequences or official condemnation from Government. As a result, the people who pay the price are those in our communities who are suffering for want of a bank, and will continue to suffer. We have heard a lot about that today.

Of course, we have these mobile banks, but they really do not answer the question of what we do without a bank. They are not disability compliant, their reliability is questionable at best, and they simply do not fit the bill or take the place of a bank. We also know that the gaps left by banks cannot be properly filled by post offices. That is no reflection on post offices, which work hard to provide a good service to our communities, but they are not banks and they cannot fill the gap. As the Minister will know, the Treasury Committee concluded that post offices

“should not be seen as a replacement for a branch network, but a complementary proposition”.

Other Members have talked about the fact that post offices simply cannot fill that gap.

Along with branch closures we are witnessing the demise of free cash machines, as we have heard. About 10 free-to-use ATMs a week have been shut down in the past year. As far as I can make out—although I hope the Minister will contradict me—the Treasury seems to have been deaf to all pleas for Government intervention to protect free cash. I hope that the Minister is able to offer some comfort today.

[The Economic Secretary to the Treasury (John Glen)]

It was in the Budget.

[Patricia Gibson]

I look forward to hearing from the Minister, who is speaking from a sedentary position.

The ATM Industry Association has warned that one fifth of Scotland’s free ATMs will start to charge consumers in the next year. That can be seen only as a cynical move to force us to become a cashless society. Picking up what has been touched on by my hon. Friends the Members for Kilmarnock and Loudoun, for East Renfrewshire, and for Midlothian, and the hon. Member for Strangford, bank closures have, as we now know—the game is up—been a tool to force people to bank online. As banks have quietly cut the fees that they are willing to pay machine operators to provide bank customers with access to cash, they are forcing us to go cashless and online. Banks are attempting to put pressure on customers who do not act in a way that they—the banks—find convenient. What happened to the customer being king?

Going cashless and banking online may, as we have heard, be the preferred option for some—and good luck to them—but some of us do not want to go down that route, and increasingly aggressive efforts are being made for it to happen, at breakneck speed. I and those of my constituents who do not favour those options will not be forced to bank online. We will not be bullied into doing so or into going cashless. It is a rum do when the service provider is bullying the customer—because that is how it feels. In any case, even among customers who may be interested in banking online there are some who simply are not able to, for a variety of reasons that the Minister will understand, and of which the hon. Member for Strangford reminded us.

I have corresponded with the Treasury about online banking in the past, and it accepted that broadband access is not yet good enough for everyone to rely on digital banking. The Government and the access to banking standard must ensure that banks have a social responsibility to provide banking facilities to all our towns. Such services could be provided relatively easily through the wide rolling-out of banking hubs. Indeed, I met the Minister in his constituency to discuss that very issue last year. I am hoping—I am quite excited about it—that he will be able to update me on progress with that. I am sure that the Minister will correct me if I am wrong but I cannot see any discernible obstacle to the option except for perhaps a lack of political will and, indeed, the arrogance and intransigence of the banking industry.

Our communities and constituents deserve better than they have had up to this point. Banks have to face up to their social responsibilities, get their heads together and create banking hubs in our towns, across the board. There is no real impediment to that, and I urge the Minister to use his good offices to bang some banking heads together and ensure that customers’ voices are heard. The Government have a role to play when the last bank in town is closed. They have said repeatedly that those are commercial decisions, but it is not just a commercial matter. It is about social responsibility and financial inclusion. I urge the Minister to reflect further on the strong feelings and concerns that have been expressed today. Will he finally bring forward legislative proposals to ensure that banks live up to their responsibilities to our communities?